U.S. consumer sentiment rises to highest since 2007

U.S. consumer sentiment rose to the highest level since January 2007, based on improving economy, job and wage prospects as well as falling gasoline prices, the Thomson Reuters/University of Michigan data showed.

The final reading of the consumer sentiment index in December increased to 93.6 from 88.8 in November, the fifth straight monthly gain and higher than the average level of 89 during the five-year economic expansion before the financial crisis, according to the monthly Thomson Reuters/University of Michigan survey of consumers.

"Consumers have much to be thankful for in this holiday season: renewed job growth, larger anticipated wage gains and the steep decline in gasoline prices," said Richard Curtin, chief economist of the survey in a statement.

Nearly two-thirds of all consumers thought the economy had recently improved, and most impressively, half expected the economy to avoid a recessionary downturn during the next five years, the most favorable reading in ten years, said the survey.

Annual income gain was expected to rise 1.7 percent in 2015, up from 1.1 percent in the prior three months, according to the survey.

The sub-index gauging consumer expectations for six months from now, which more closely projects the direction of consumer spending, rose for a fourth consecutive month to 86.4 in December from 79.9 last month, which is also better than 72.1 recorded last December.

The sub-index of current economic conditions, which reflects Americans' perceptions of their financial situation and whether they consider it a good time to buy big-ticket items like houses or cars, rose from 102.7 in November to 104.8 this month, higher than 98.6 one year ago.

The U.S. economy grew at an annual rate of 5 percent in the third quarter this year after increasing 4.6 percent in the second quarter, according to the final estimate released by the U.S. Commerce Department Tuesday.